Even Without The Clean Power Plan, The Coal Industry’s Struggles Aren’t Over

REUTERS/Jonathan Ernst

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Michael Bastasch DCNF Managing Editor
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Environmental Protection Agency (EPA) Administrator Scott Pruitt said the “war on coal is over” when announcing the repeal of the Clean Power Plan, which experts expected to force more coal plants to close.

The announcement is the latest action taken as part of President Donald Trump’s “America First” energy plan. Trump promised to repeal Obama-era global warming rules to help the coal industry.

But even without the Obama administration’s global warming regulation for power plants in place, the coal industry faces major hurdles to reclaiming dominance in electricity markets.

Cheap natural gas is a major factor, but the impetus to switch from burning coal to gas for electricity became more urgent in recent years as federal regulators began cracking down on pollutants.

“Even with the repeal of the CPP, the Obama war on coal is not over by a long shot,” Steve Milloy, publisher of the website, told The Daily Caller News Foundation.

“There are still the Obama EPA Cross State Air Pollution Rule and the Mercury Air Toxics Standard,” said Milloy, an attorney and environmental policy expert.

The Cross State Air Pollution Rule (CSPR) and Mercury Air Toxics Standards (MATS) imposed costly regulations on coal plants. Both rules were finalized in the early years of the Obama administration and faced legal challenges from opponents.

The U.S. Supreme Court ruled against MATS in 2015, but the ruling meant little since most power companies had either installed more pollution control equipment at coal plants or shut them down. EPA estimated MATS would cost $9.6 billion.

About 75,000 megawatts of coal-fired power capacity has retired or converted to burning natural gas, at least in part due to EPA policies, according to data compiled by the American Coalition for Clean Coal Electricity (ACCCE), an industry group. Coal plant retirements hit record levels in 2015 — the same years MATS went into full effect.

“CSPR and MATS are the rules that are mostly responsible for wiping out 95 percent of the market value of the coal industry,” Milloy said.

The coal industry is also concerned about pending EPA rule limiting power plant waste into waterways, which they estimate could cost up to $3 billion. EPA put the rule under review in September.

Regulations aside, low-priced natural gas seems like it’s here to stay. Power companies still see cheap gas as a threat to the viability of older coal plants.

Luminant announced on Friday it would take the 1,800 megawatt Monticello Power Plant offline in January 2018. Plant operators said electricity markets were flooded with cheap natural gas, making Monticello uneconomic to operate.

In fact, Luminant took two of Monticello’s three generating units offline to comply with CSPR in 2011. Those two units were brought back online in 2014 to meet growing power demand. Now, all three units will close.

But Monticello also faced legal challenges, and possibly fines for violating stricter EPA rules. The Sierra Club and allied organizations brought suit against the plant, which is pending in federal court.

The Sierra Club celebrated the closure, saying it marked the 259th coal plant to shut down since 2010. The group said it’s only three coal plants away from reaching its goal of shutting down half the U.S. coal fleet.

“The retirement of one of America’s dirtiest coal plants demonstrates once again that dirty coal can’t compete against clean, renewable energy,” Bruce Nilles, director of the Sierra Club’s Beyond Coal Campaign.

ACCCE expects 19,000 megawatts of additional power capacity to retire or convert to gas by 2020, mostly due to EPA policies.

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